The US Federal Reserve has finally announced its eighth and final policy decision for 2024 after a two-day meeting of the Federal Open Market Committee (FOMC). It has cut interest rates by 25 basis points. Notably, this is the Fed’s third rate cut in 2024.
Notably, Wall Street had expected the central bank to cut interest rates by 25 basis points (bps) for the second consecutive meeting, after cutting them to 4.50-4.75 percent in November. Markets were confident of a rate cut, with CME Group’s FedWatch tool indicating a 99% probability.
The central bank’s latest policy assessment came just after Republican Donald Trump won a landslide victory in the 2024 US presidential election. At its September meeting, the US Fed cut its benchmark interest rate by 50 basis points to 4.75-for the first time in four years. 5 percent, after policymakers expressed confidence that inflation was consistently on track to be near the target level.
Fed is in no hurry to cut rates
US Fed policymakers estimate that the benchmark interest rate will fall by another half point by the end of this year, another full percentage point in 2025 and a final cut of half a point in 2026, ending in a range of 2. 75 percent to 3.00 percent. .
Fed Chairman Jerome Powell had previously indicated that the committee is in no rush to cut key interest rates and that the committee will be more cautious in cutting rates.
Goldman analysts also previously referred to one speech by Beth Hammack, president of the Federal Reserve Bank of Cleveland, in which she stated that resilient growth, a strong labor market and high inflation justify maintaining a modestly restrictive monetary policy for some time because this could help “keep inflation sustainable manner to the level of inflation”. 2 percent on time.”
Impact on cryptocurrency
“While a rate cut is undoubtedly good for Bitcoin’s price, it appears the market has already priced in a 25 basis point cut in December,” said Min Jung, research analyst at Presto Labs. He added that the actual rate cut as a result could have minimal direct impact on Bitcoin’s price.
Jung emphasized that attention will focus on the Summary of Economic Projections from the December FOMC meeting and Powell’s comments on future rate cuts. He noted that any unexpected developments or surprises resulting from these factors will likely be the main drivers of Bitcoin’s price action.
Recently, Bitcoin (BTC) took a break after hitting an all-time high of $108,268 as traders waited for the Federal Reserve’s expected rate cut and the optimism of Bitcoin’s strategic reserve plans.
Credit : coinpedia.org
